Sasol Raises Estimated Cost of Gas-to-Liquids Plant in US
December 3, 2012
Sasol Ltd. (SSL), the world's largest producer of motor fuel from coal, is going ahead with the construction of a gas-to-liquids plant in the U.S., but the cost will be as much as $6 billion higher than previously estimated, it said Monday.
The increase is due to 30% of the fuels being upgraded to "high value chemicals" and construction of the Louisiana-based plant taking place in two phases.
Sasol spends about two-thirds of its capital outlay in its home country of South Africa, but has said previously it plans to grow its presence in the U.S. and Canada over the next few years. On Monday, it said it will prioritize its projects in the U.S. over Canada.
Chief Financial Officer Christine Ramon said in a trading update Monday that the company has completed a feasibility study for the Louisiana plant, and it estimates the two-phase project--which will produce 96,000 barrels of diesel and other fuels a day--will cost between $11 billion and $14 billion. That is up from an estimate in September of $8 billion.
"We expect beneficial operation to be achieved during the 2018 and 2019 calendar years for the two phases," Sasol said.
As part of its U.S. growth strategy, Sasol is also going ahead with the construction of an ethane cracker that will cost between $5 billion and $7 billion and will have an annual production of 1.5 million tons of ethylene.
The company said it is putting a plan to build a gas-to-liquids plant in Canada on hold, having previously said it was thinking about building a 48,000-barrel-a-day plant in Alberta that would cost about $8 billion.
Separately, it said it continues to have talks on the sale of its stake in an Iranian polymer plant. The company said in November last year it planned to sell its holding in Arya Sasol Polymer Co. because of U.S. and European Union sanctions against Iran. Sasol stopped buying crude oil from Iran in January. It said parties interested in its stake include business and government stakeholders.
Source: Dow Jones Newswires
Engineering News Archive